About one month into the novel coronavirus pandemic, Joseph Carnevale, president of the Insurance Brokers Association of Ontario (IBAO), made a spirited declaration about the value of an insurance broker.
“I think for the longest time, as brokers, we have always promised our clients that we would be there in their time of need,” Carnevale said as a panellist on a Canadian Underwriter webinar about business continuity. “We not only have a great relationship with them, we not only understand their needs and provide them with the right products and the right service to support that, but we would be there for them in their time of need…
“This particular pandemic has provided us the opportunity to actually live that and to demonstrate that. We are the trusted advisor. More so than words, we are living it, we are breathing it, we’re doing it, and we are acting on that.”
So what is a trusted insurance advisor?
The Insurance Brokers Association of Canada (IBAC), Canada’s national broker association, lays out three pillars of what the industry commonly refers to as the “broker value proposition.” Basically, brokers provide advice, choice and advocacy for the insurance consumer.
Brokers work for consumers, not insurance companies. Because of this independence from the manufacturers of the product (the insurance policy), brokers are able to:
Offer consumers a wide variety of products and price comparisons from a number of insurance companies
Advise on a customer’s specific risks and suitable insurance protection
Provide clear information and explain policy details
Support and represent customers if they need to make a claim
Consumers are of course the best judge of whether brokers are practicing what they preach. And so, Canadian Underwriter canvassed the opinions of 653 Canadians who purchased home and auto insurance from a broker, as well as representatives of 159 Canadian businesses (most of them small businesses), and asked them what they thought about the service they were getting from their brokers.
We based the survey questions on the very services that brokers say they provide to consumers. We conducted the survey Mar. 6 to 13, just before the pandemic went into full effect (the World Health Organization declared the novel coronavirus to be a global pandemic on Mar. 11). At that time, brokers were helping consumers navigate through a different form of crisis: A hardening market cycle in the industry meant that consumers’ insurance premiums were increasing while their coverage options were shrinking.
It was not an easy time to be a broker, as consumers had every reason to be frustrated about rising insurance costs. And yet, our 2020 Trusted Advisor Survey suggests that if they were upset, it wasn’t about the service they were getting from their brokers.
On the contrary, the survey results indicate that brokers were already living up to their “trusted advisor” status pre-COVID, during the dreaded hard market. Seventy-one percent of business customers and 70% of home and auto insurance customers surveyed either strongly agreed or agreed with the statement that their broker is “a trusted advisor.”
In a series of articles as part of this special Trusted Advisor Hub, Canadian Underwriter will explore the results of this survey and others, as we examine what it means to be a trusted insurance advisor.